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UNSWORTH TRANSPORT INTERNATIONAL v. CA

FACTS:

On August 31, 1992, Sylvex Purchasing Corporation delivered a shipment of various raw materials for pharmaceutical manufacturing to Unsworth Transport International (UTI). UTI issued a Bill of Lading covering the shipment. The shipment was insured with Pioneer Insurance and Surety Corporation in favor of Unilab against all risks. The shipment was loaded in a container van and boarded on American President Lines' (APL) vessel for delivery to Unilab.

When the shipment arrived at the port of Manila on September 30, 1992, it was received by petitioner after stamping the Permit to Deliver Imported Goods. Three days later, a survey was conducted, which revealed that some of the drums in the shipment were damaged.

On October 15, 1992, the arrastre Jardine Davies Transport Services loaded the shipment on a truck for delivery to Unilab's warehouse. The materials were noted to be complete and in good order. However, when the shipment arrived at the warehouse, a survey revealed that some of the items were damaged and unfit for use.

On November 7, 1992, Unilab filed a formal claim for damages against UTI and Pioneer Insurance. UTI denied liability based on the gate pass issued by Jardine stating that the goods were in complete and good condition. Pioneer Insurance paid the claimed amount and filed a complaint for damages against APL, UTI, and petitioner.

After trial, the Regional Trial Court (RTC) rendered a decision in favor of Pioneer Insurance, ordering APL, UTI, and petitioner to pay damages. The Court of Appeals (CA) affirmed the RTC decision, finding UTI and petitioner liable as common carriers and for their failure to exercise the required diligence.

Petitioner filed a petition for review on certiorari, raising several issues, including whether it is a common carrier and whether it exercised the required diligence.

ISSUES:

  1. Whether or not the Court of Appeals committed grave abuse of discretion in upholding the decision of the Regional Trial Court awarding damages and attorney's fees.

  2. Whether or not petitioner UTI is a common carrier.

  3. Whether or not petitioner UTI exercised the required ordinary diligence.

  4. Whether or not the private respondent sufficiently established the alleged damage to its cargo.

RULING:

  1. The Court of Appeals did not commit grave abuse of discretion in upholding the decision of the Regional Trial Court awarding damages and attorney's fees.

  2. Petitioner UTI is considered a common carrier by the Court of Appeals.

  3. Petitioner UTI did not exercise the required ordinary diligence.

  4. The private respondent sufficiently established the alleged damage to its cargo.

PRINCIPLES:

  • A forwarder can also be considered a common carrier depending on the circumstances.

  • A common carrier is liable for the loss, destruction, or deterioration of the goods unless it proves that it has exercised extraordinary diligence.

  • The liability of a depositary is to exercise ordinary diligence in the care of the goods entrusted to it.

  • The value of the goods as declared in the letter of credit and pro forma invoice determines the carrier's liability in case of loss or damage to the shipment.

  • A bill of lading is not indispensable for the execution of a contract of carriage.